USDJPY Extends Gains for the Fifth Consecutive Day, Focus on Next Year’s U.S. Interest Rate Outlook【December 13, 2024】

Fundamental Analysis

• The U.S. Producer Price Index (PPI) exceeded forecasts, suggesting that the decline in interest rates might be more gradual.
• The European Central Bank has implemented its third consecutive rate cut, with indications of continued rate reductions in 2025.
• The Swiss National Bank surprised markets with a significant rate cut aimed at preventing excessive appreciation of the Swiss Franc.

USDJPY Technical Analysis

USDJPY remains above the 200-day moving average, maintaining a gradual upward trajectory. Expectations for a rate hike in next week’s Bank of Japan meeting are low, with the decision likely deferred to next year. Meanwhile, U.S. inflation-related indicators have shown mixed results, but the rise in unemployment claims has heightened market sensitivity.

Using Fibonacci Expansion, 159.28 JPY corresponds to the 61.8% level. The pair has found support near the 72-day moving average, and a scenario where USDJPY rises to the 160 JPY range should also be considered.

Day trading strategy (1 hour)

Analyzing the 1-hour chart, USDJPY is reacting to the 72-hour moving average. Yesterday, it hit a high of 152.80 JPY before closing higher. Market sentiment is evenly split, making it essential to monitor developments from the upcoming Bank of Japan meeting.

For short-term day trading, consider buying on dips near 152.60 JPY, aiming for a take profit at 153.20 JPY. Set a stop loss at 152.40 JPY.

Support/Resistance lines

Key support and resistance lines to consider:

• 153.18 JPY: Monthly resistance line

Market Sentiment

USDJPY Sell: 50% / Buy: 50%

Today’s important economic indicators

*Trading advice in this article is not provided by Milton Markets, but by Shu Fujiyasu Jr., a certified technical analyst.